New Jersey

June 04, 2015

There’s an old joke that goes “What’s the difference between a used car salesman and [insert any type of salesman, consultant, agent or other professional 'persuader.']? A. The used car salesman knows when he’s lying.”

I know, nasty stereotype. On the other hand, it’s easy to imagine how used car dealers’ unique “persuasion” skills, so suitable for selling used cars, might be just as helpful to them in the political world.

However, they also point out, “While it has long been against federal law for new cars to be sold with safety recalls, there is no similar legislation to protect individuals who drive used or rental cars. Reformers want to change this, and make it illegal to sell or lease all recalled vehicles until they have been repaired.”

Unfortunately, federal legislation has (so far) stalled, so “In the meantime, auto dealers have shifted their attention to state legislatures, where lawmakers in California and New Jersey are now considering bills that would require car dealers to disclose whether a used car has an open safety recall at the time of purchase.” The car dealers call this measure “pro-consumer” with supporters making proud statements like, “Consumers have a right to all background information about their vehicles, particularly when that information can help them protect themselves and their families. This measure will promote transparency at used car dealerships and help put buyers at ease.”

Who could argue with that? Except when you understand what this bill really means: car dealers will be able to deliberately sell their customers vehicles with lethal safety defects.

Bernard Brown, “a founding member of the National Association of Consumer Advocates, a consumer attorney organization that opposes New Jersey and California’s bills,” toldThe American Prospect, “The reason for these bills is to effectively make it legal to sell recalled cars.… These [disclosure] bills would greatly undermine existing protections. On its face it may seem like they’re better, but they’re not. …They’re decidedly worse.”

“These laws are effectively ‘Get Out of Jail Free’ cars for dealers,” concurred Taras Rudnitsky, a former car safety engineer who now works as a lawyer for victims of vehicle defects. Under current negligence law, dealers have to demonstrate that they have acted in a reasonable and prudent way—which victims can argue includes selling safe vehicles to consumers. Introducing disclosure notices, Rudnitsky believes, could become the new legal burden a prudent dealer must meet in court.

In California’s case, for example, this bill would provide dealers with a loophole to get around a bunch of other laws that protect motorists. The Sacramento Bee has editorialized against the bill, noting “We err on the side of caution, especially on matters of auto safety. A defective car threatens more than the driver. It’s a safety issue for passengers and other motorists.”

We should note that bill supporters like New Jersey’s Assembly Sponsor Paul Moriarty, have an argument. He says:

[H]e had originally sought to prohibit retail sales of used cars with open recalls, but changed his mind after learning that used car dealers could unfairly lose a lot of business and perhaps face ruin as a result of a large, unexpected recall by a vehicle manufacturer. "Theoretically, you could wake up one morning and have half of your inventory unsalable," he said. "If they've got 100 cars that need to be fixed by Honda, how fast do you think the Honda dealer is going to take care of those cars when [Honda has its] own customers to take care of?" Moriarty said.

Ok so in order to keep a used car dealer in business, people are supposed to drive around in unsafe vehicles and perhaps die? This mentality is perhaps fitting for apocalyptic fantasies like Mad Max: Fury Road. Not New Jersey.

May 15, 2014

Who knew the New York Times had a sexist underbelly? Like the rest of the world we’re just speculating here, but yesterday’s abrupt firing of New York Times top editor Jill Abramson over possible complaints about pay disparity has made us realize something: the struggles shared by many Americans to be paid fairly for their work is also shared by the Executive Editor of the New York Times! (And if that’s true, what hope is there for the rest of us?) The New Yorker's Ken Aulettawrites:

As with any such upheaval, there’s a history behind it. Several weeks ago, I’m told, Abramson discovered that her pay and her pension benefits as both executive editor and, before that, as managing editor were considerably less than the pay and pension benefits of Bill Keller, the male editor whom she replaced in both jobs. “She confronted the top brass,” one close associate said, and this may have fed into the management’s narrative that she was “pushy,” a characterization that, for many, has an inescapably gendered aspect.

Of course, she's not the only one. Coincidently, today, hundreds of fast food workers decided to strike in “dozens of U.S. cities” trying to get a barely decent wage - $15 an hour – and the right to form a union.

Restaurants such as McDonald's, Burger King, Wendy's and KFC are being targeted. The strike, targeting the $200 billion fast-food industry at a time of intense competition, is aimed at directing consumer attention to the low wages of most fast-food workers. The one-day campaign continues protests launched 18 months ago.

As the workday was getting underway in New York, employees at a McDonald's near Penn Station chanted "unfair wages" as others beat drums and blew trumpets.

In fact, these fast food strikes are happening all over the world today. Meanwhile, check out some of the other companies that have been caught cheating their U.S. workers this week:

“A Walmart contractor that operates many of the retailer's distribution centers has agreed to pay $21 million in backpay to warehouse workers in California who claim they were systematically shorted on pay for years.”

“Two New Jersey ship repair companies — Bayonne Dry Dock and Repair Corp. and Coastwide Material Supply Corp. — paid $277,565 in unpaid wages and liquidated damages for distribution to 224 workers who worked for the firms at the Military Ocean Terminal in Bayonne, N.J., the Department of Labor reported."

"The United States Department of Labor released a report on Thursday that found Black Bear Burritos, LLC to be in violation of the Fair Labor Standards Act. According to the Department of Labor, $232,295 in back wages is owed to 105 employees from two different restaurants in Morgantown [West Virginia]."

You know that Karl Marx saying, “workers of the world unite? Maybe he was onto something.

February 21, 2014

Shout out today to the whistleblowers of the world, who are subjected to the worst kind of insults when reporting fraud. Take yesterday’s front page New York Timesstory today about information uncovered through a False Claims Act lawsuit against the Harris School of Business.

This is a for-profit school owned by the Premier Education Group, which “owns more than two dozen trade schools and community colleges operating under several names in 10 states.” Both companies have been sued for “charging more than $10,000 for programs lasting less than a year,” where “school officials routinely misled students about their career prospects, and falsified records to enroll them and keep them enrolled, so that government grant and loan dollars would keep flowing.”

In a separate case in New Jersey, dozens of former Harris students say that the school lied about what professional certifications they would qualify for after completing their courses; some were given a brochure saying they could sit for a dental assistant certification exam — an exam that had not been offered for years. Premier settled a similar case a few years ago before it went to trial.

The former employees’ federal suit also charges that the school enrolled people who should not have been in its programs — like a student enrolled for massage therapy, though he had been convicted of a sex crime, which would prevent him from being licensed. They say the schools enrolled students who had not graduated from high school, though their programs required it, including some who presented diplomas from known fraudulent “diploma mills.”…

The most striking allegations against Premier involve students who were not capable of doing the work because they lacked the mental stability, academic skills or English proficiency, yet were kept on the books so the schools could collect their federal aid, which requires that a certain percentage of students make progress toward completion. When teachers gave them failing marks, the former employees charge, administrators changed the grades and falsified the attendance records.

Ms. Amaya, [one of the whistleblowers], said she was promoted by Harris, and then fired for insisting on following the rules.

The company’s response? To call the lawsuits “frivolous” and to question the motives of those who blew the whistle: “Jonathan D. Farrell, a lawyer for the company, said some of the people suing the company 'may have financial motives,' while others are resentful over being dismissed, and 'some are misguided.'"

So let’s be clear how effective the False Claims Act has been providing people the opportunity to blow the whistle on corporate fraud and abuse – so much so that the U.S. Chamber of Commerce has made it part of their mission to destroy this law, despite how much money taxpayers have recovered. (See, e.g., today’s story about the whistleblower lawsuit against Tenet Healthcare and some of its hospitals in Georgia and South Carolina, charging that obstetric clinics referred women to hospitals in exchange for kickbacks from fraudulent Medicare and Medicaid claims – a scheme that “went on for more than a decade.” )

But check out this shocking Washington Poststory about “one of the nation’s largest government contractors,” which is “requir[ing] employees seeking to report fraud to sign internal confidentiality statements barring them from speaking to anyone about their allegations, including government investigators and prosecutors." This is according to a lawsuit just filed.

Attorneys for a whistleblower suing Halliburton Co. and its former subsidiary, Kellogg Brown & Root, said the statements violate the federal False Claims Act and other laws designed to shield whistleblowers.

“The apparent purpose and intent of the confidentiality agreements was to vacuum up any potential adverse factual information, conceal it in locked file cabinets and gag those with first-hand knowledge from going outside the company,” Stephen M. Kohn, an attorney for the whistleblower, wrote in the complaint.

Between 2002 and 2011, KBR was the largest U.S. contractor operating in Iraq and Afghanistan, winning nearly $40 billion worth of federal work, according to the U.S. Commission on Wartime Contracting in Iraq and Afghanistan. KBR has been the subject of numerous lawsuits and allegations of fraud relating to contracts with the U.S. government, according to the war commission and the Justice Department.

Tim McCormack, a lawyer who specializes in whistleblower cases, said that he has seen numerous confidentiality agreements but that the one used by KBR is particularly stark because it threatens employees with termination and possible legal action if they speak out.

“This is mostly about trying to scare someone into not talking,” McCormack said. “It’s very effective to say you will be fired or sued. This is a very big company with lots of resources.”

January 31, 2014

I know. Who doesn't want to be in this picture right now? But if instead you are headed to Met Life Stadium in East Rutherford, NJ for the Super Bowl this Sunday, don’t worry about the weather. Might be a little cold (although not polar vortex cold) but at least it’s not supposed to rain, which is good news because among the very long list of things you can’t bring into the stadium are umbrellas. Also, no beach balls. Oh well. (Perhaps they meant “snow balls”?)

Anyway, in addition to the umbrella ban, Met Life stadium is taking all kinds of safety precautions. NBC News notes that there will be “more than 3,000 security guards, 700 cops and hundreds of high-tech gadgets” as people enter. In fact, law enforcement is launching “the biggest and most-expensive security net in the 48-year history of the game.” However,

This Super Bowl, says Ed Hartnett, former head of the New York Police Department’s Intelligence Unit, “truly defines the word ‘challenge’ when it comes to security.”

There is no intelligence indicating that terrorists have targeted the game or related events, but Hartnett says that doesn’t mean that threats don’t exist: “I would list them in priority order being a suicide bomber, a vehicle laden with explosives and a mass shooter or mass shooters similar to the Kenyan mall, or the Mumbai incidents,” he said. His concerns are echoed by law enforcement officials overseeing the game.

Also, “Of particular concern for security officials are potential bombings like those that killed 34 people in a railway station and on a trolley in Russia ahead of the upcoming Sochi Olympics, said Col. Rick Fuentes, superintendent of the New Jersey State Police."

Not that we’re trying to scare anyone. But here’s another fun fact that nobody really wants to talk about. If for some reason you attend the Super Bowl and the terrorist security precautions fail, there won’t be much that you can do about it. Well, you can try to hold someone accountable but you won’t get very far in court against Met Life Stadium, that's for sure.

The stadium boasts in its Super Bowl press packet that it is the “first NFL Stadium to be ‘Safety Act Certified’ by the Department of Homeland Security (2013).” We have covered this law before – you can read more about it here. It means that the stadium has “wide-ranging immunity from future lawsuits that might stem from terrorist attacks” i.e., any and all spectators have lost their right to sue for damages.

As Walter Cooper, director of research and education for the University of Southern Mississippi's National Center for Spectator Sports Safety and Security said earlier, "The NFL has Safety Act approval for its security management system, which means if there is a major incident in an NFL stadium, the league and the team are going to be in a lot better place in terms of litigation that might take place." That means spectators won't be.

If the NFL is so concerned with litigation, perhaps it should figure out how to stop players’ concussive brain injuries, especially since, “Three-quarters of a billion dollars might not be enough to pay former NFL players for damage from the bone-jarring, brain-rattling hits they took on the gridiron,” according to the federal judge who was reviewing a proposed settlement between damaged players and the NFL. Just sayin'.

January 27, 2014

It’s back home for the more than 600 (out 3,000) passengers on the “Explorer of the Seas” Royal Caribbean cruise who likely caught the noroviruses, “a common cause of gastroenteritis, which produces vomiting and diarrhea.”

The U.S. Centers for Disease Control and Prevention wants the ship better sanitized so the ship is leaving beautiful St. Thomas and headed home to New Jersey, which leads the nation in toxic waste dumps. There’s some irony in this.

When these passengers return, they will likely discover that buried in the fine-print of their ticket is a ban on class action lawsuits. They may find other language, like this:

The cruise line is not "liable to the passenger for damages for emotional distress, mental suffering/anguish or psychological injury of any kind under any circumstances, except when such damages were caused by the negligence of Carnival and resulted from the same passenger sustaining actual physical injury, or having been at risk of actual physical injury."

In other words, to bring a lawsuit, they may need to prove that actual physical injury resulted as a result of “unsanitary conditions aboard on the ship.” Let’s hope this new batch of sick passengers makes their case because cruise ship indifference to the health of their passengers has got to stop We are tired of this story!

Meanwhile, if you’re one of those New Jersey passengers whose vacation was cut short, think twice before visiting New York City. There is a fascinating but disgusting story in the New York Times today about the ubiquitous water towers on top of many NYC buildings. (There are estimated to be 12,000 to 17,000 of them.) Writes the Times,

[I]nside these rustic-looking vessels, there are often thick layers of muddy sediment. Many have not been cleaned or inspected in years. And regulations governing water tanks are rarely enforced, an examination by The New York Times shows.

Even some that are routinely maintained contain E. coli, a bacterium that is used by public health officials to predict the presence of viruses, bacteria and parasites that can cause disease.

When found in drinking water, E. coli, a microbe carried in the feces of mammals and birds, requires the issuance of a boil-water order, according to federal Environmental Protection Agency regulations.

Samplings taken by The New York Times from water towers at 12 buildings in Manhattan, Queens and Brooklyn found E. coli in five tanks, and coliform in those tanks and three more. Coliform by itself is not harmful, but does indicate that conditions are ripe for the growth of potentially dangerous microorganisms. The positive results all came from the bottoms of the tanks, below the pipe that feeds the buildings’ taps, though public health experts say the contamination is still a concern because the water circulates throughout the inside of the tanks.

Dr. Stephen C. Edberg, “a public-health microbiologist at Yale University who invented the now-standard test for bacterial contamination in drinking water” wrote to the city:

“Fecal contamination means that the towers are subject to animal intrusion, almost certainly birds and potentially animals such as squirrels. Clearly, these units are not sealed to the outside.”

City health officials insist that the tanks are safe, and that the laws governing them are adequate. The city’s 311 help line gets dozens of calls each year from residents saying they have become ill from drinking water, but health officials say no cases have ever been traced back to a water tank.

That does not mean people are not getting sick, Dr. Edberg said.

“It’s very hard, with a population as large and dense as New York, to even ascertain even reasonably large illness outbreaks,” he said. “You’d literally have to have entire apartment buildings getting sick at the same time.”

February 26, 2013

Yesterday, a New Jersey jury ruled in the first of about
1,800 vaginal mesh cases pending in that state against Johnson & Johnson and its
subsidiary, Ethicon. The jury
could not have been more clear: $3.35 to a South Dakota nurse, who was surgically implanted with a Gynecare Prolift vaginal mesh. This device injured
her so severely that she’s already undergone 18 operations to try to repair the damage.
From our earlier coverage of vaginal meshes:

The FDA approved surgical meshes for procedures like
abdominal surgery. But J&J
began marketing them for use in a women’s vaginal area, treating problems like
incontinence. Subsequently,
hundreds of women became severely injured and some died as the meshes began
disintegrating, growing into tissue and becoming impossible to remove.

Meanwhile, the company’s Securities and Exchange Commission
filing revealed last Friday that the United States attorney’s office in Massachusetts and the
civil division of the Justice Department are investigating J&J's marketing of its its ASR hip replacements. That’s the Frankensteinian device
that J&J finally recalled in 2010 even though it apparently knew the device was failing
and releasing high levels of metallic ions, and which it is now
defending in a bunch of lawsuits. See some of our previous coverage here.

And also last Friday, the U.S. Food and Drug Administration said
it has “notified healthcare professionals of a Class I recall, the most serious
type,” of J&J’s LPS Diaphyseal Sleeve, used in reconstructive knee
surgery. Apparently, says the FDA, this device as the “potential for fractures” and the FDA has already received 10 reports of the
device malfunctioning:

A fracture in the sleeve at the joint of it could lead to
loss of function or loss of limb, infection, compromised soft tissue or death,
the FDA said.

From now on, Johnson & Johnson needs to stick to cotton
swabs. The outer ear is as far
inside the body we would like J&J products to go, thank you very much.

January 15, 2013

There are some aspects of the insurance industry’s response to
Hurricane Sandy that would almost be funny if not so tragic. Take the Traina’s of Staten
Island. Their flattened home “was crushed
in part by falling trees and its wreckage pushed back from the street by
sanitation trucks.” Despite this,
their insurer Allstate is claiming all by $10,000 of damage was caused by
flooding, and claim that their homeowner policy’s standard “flood exclusion” shields
Allstate from paying any more than $10,000. The Traina’s are desperately trying
to get a fair settlement out of this company, which so far refuses. But here’s the incredible part (since so far, the story is fairly typical.) Allstate is using the Traina’s
flattened home in TV commercials touting its “you’re in good hands”
slogan! Really, have they no
shame at all? (Rhetorical question.)

It’s a undeniable fact that insurance companies are
quick to deny responsibility for most of the damage its policyholders suffer from Hurricanes. (See our prior
coverage here,)
Immediately following Katrina, some
tried to argue (although unsuccessfully) that these flood exclusions in homeowners policies should be
void because, by their very nature, they are designed to leave people stuck
after a hurricane. You can see the
point. This is so confusing for policyholders because flood
exclusion clauses are contradicted by other sections of the same insurance
contract.

For example, many policyholders are asked to sign “hurricane
endorsements” with clearly labeled “hurricane deductibles" (usually for some
percentage of the property value), while at the same time, flood damage
connected to hurricanes is purportedly excluded elsewhere in the policy. This
misleading language is often compounded by the fact that the flood exclusion is
never explained to the policyholder, or that many people are told by their
insurance agents that they do not need to purchase federal flood insurance
because their homes are not in flood zones.Newsdayreports, for example, that “fewer than half of
the 95,500 buildings damaged in Nassau and Suffolk counties by superstorm Sandy
were covered by flood insurance.”

Ambiguous policy language is supposed to be construed in favor of
the policyholder, since it is drafted by the insurer and presented to the
consumer on a take-it-or-leave-it basis.
But clearly, more needs to be done to help policyholders BEFORE they
sign these contracts. That’s why we were so glad to see that in New Jersey, a bill
has been introduced “that would require home insurers to provide New Jersey
policyholders with a one-page summary about what their insurance covers, and
what it does not" (although the bill reportedly got a pair of amendments that
“made the measure more palatable to the insurance industry,” i.e., they will
“prevent the summary from being read or construed as part of one's policy.”
Oy.) But here’s what the bill will do:

The proposed summary would list “notable” events that are
covered or excluded from one’s homeowner’s policy. It is intended to dispel
some of the confusion that arose after Hurricane Sandy, when many homeowners
were surprised to find out their insurance did not cover their homes to the degree
they expected. For example, standard homeowner’s policies do not cover flood
losses, while separate flood insurance, which is underwritten by the National
Flood Insurance Program, is subject to many limitations.

The proposed one-page document would come packaged with a
person’s homeowners policy and subsequent renewals, alongside other consumer
information about hurricane deductibles and flood insurance.

This won’t solve every problem, clearly. But one thing at a time, I guess.

November 20, 2012

The National Safety Council has issued a lovely statistic for this Thanksgiving holiday (which, for their purposes, runs from 6:00 p.m., Wednesday, November 21 until 11:59 p.m., Sunday, November 25.) They estimate that 451 will die on the road and about 48,300 will have “nonfatal medically consulted injuries.” Ah, Thanksgiving, a.k.a., the deadliest time to be out driving. So we’d like to offer PopTort fans some holiday tips to stay safe.

First of all, don’t be drivin’ in red states. You heard us! In one of the more curious car crash stats out there, it seems like,

To an extent that mystifies safety experts and other observers, federal statistics show that people in red states are more likely to die in road crashes. The least deadly states – those with the fewest crash deaths per 100,000 people – overwhelmingly are blue.

Lots of theories on why this may be: speed limits, access to trauma centers, long rural roads, Chris Christieyelling at New Jerseyans.

But to be serious about this, there’s also the very grim reality of distracted driving (texting), which is now involved in one in four accidents despite 38 states banning it. In fact, speaking of New Jersey, courts there are grappling with an interesting new twist in civil litigation theories about texting-related crashes. A decision is expected soon (Friday according to thisCBS report) on an appeal brought by a couple horribly injured by an 18-year-old driver, who slammed into their motorcycle while he was texting. David and Linda Kubert, who both lost legs in the crash and are now in serious financial straits, settled with the teenage driver for $500,000. But they have also sued his girlfriend Shannon Colonna, who they say was the one who kept texting the boy, knowing he was driving (although she denies this).

The argument is that while “Colonna was not physically present at the wreck, she was ‘electronically present.’” They argue, “Colonna knew, or should have known Best would have been driving and was therefore partly liable. [Their attorney] said her actions constituted aiding and abetting negligence and that she was ‘virtually present’ at the scene of the accident.”

At this point, they are just asking for the case to go to a jury. It’s on appeal because earlier this year, a lower court judge dismissed the case against Colonna on summary judgement, a first-of-its- kind case at the time. We expect it won’t be the last. Drive safely, everyone.

June 20, 2012

Actually, the exact quote could be found on stickers worn by union reps outside LA’s downtown courthouse last week: “Justice has left the building.” But if you’re in California, or for that matter, if you’re poor anywhere, it’s really “civil justice” that’s not only left the building but has essentially flown off to wherever Elvis himself is these days. And I don’t mean Vegas.

Responding to a severe statewide budget crisis, on Friday the Los Angeles County court system began a series of extraordinary layoffs and cutbacks affecting “431 employees and 56 [mostly civil] courtrooms in a county that's home to nearly 10 million people.”

Presiding Judge Lee Smalley Edmon said it was one of the saddest days in the history of the Los Angeles Superior Court. She expressed concerns for the people laid off as well as consumers who will face a slowdown in resolving civil cases.

While it’s the largest county affected, it’s not the only county affected:

In Fresno County, seven branch courthouses in outlying areas are being closed. Residents in those rural areas will have to travel longer distances to file lawsuits.

In Ventura County, as in Los Angeles County, the services of court reporters are being eliminated for civil trials. Litigants will have to hire their own court stenographers and in some cases judges are being told they may have to take notes on their own cases rather than rely on a printed record. …

The union representing state and municipal employees – the American Federation of State, County and Municipal Employees – called Friday's action a "freeze on justice in Los Angeles" and warned that the county would experience "an end to timely justice" with cases being delayed for years, particularly in civil courts.

And as bad as this all is, it’s nothing compared to what’s happened to the poor in the country. NPR ran a heartbreaking story on Friday about the state of crisis in which Legal Services finds itself because “the number of poor people who need legal advice has gone through the roof — more senior citizens and more homeowners who lost their jobs” while at the same time there are severe funding cutbacks. NPR started the story with a key observation:

Nearly 50 years ago, the Supreme Court ruled that people accused of a crime deserve the right to a defense lawyer, no matter whether they can afford to pay for one. But there's no such guarantee when it comes to civil disputes — like evictions and child custody cases — even though they have a huge impact on people's lives.

For decades, federal and state governments have pitched in to help. But money pressures mean the system for funding legal aid programs for the poor is headed toward a crisis.

Legal Aid offices are being closed all over the country. People are being turned away in droves. “Imagine that a woman being abused who comes in to seek a protective order against an abuser who may have a lawyer himself, and she's turned away because there aren't children involved, ” said Jim Sandman of the Legal Services Corp.

Looks what’s happening in New Jersey, for example. According to a new report by Legal Services of New Jersey:

Fewer than one in 10 poor adults in New Jersey are able to get a lawyer to represent them when they're threatened with eviction, foreclosure or other serious legal problems.

That means an estimated 400,000 people go without the legal representation they need,. And the consequences can be catastrophic, the report adds.

“The inability to afford a lawyer or get legal help too often determines whether a family is evicted from an apartment, if a home is foreclosed, if an ailing man gets disability benefits or even if child-custody payments are sufficient to feed and clothe the children of a broken home,” said Melville D. Miller Jr., president of Legal Services.

The solution proposed to address this is to increase fees plaintiffs pay to file civil cases (see today's Philly Inquirer editorial ), although I have to say that ironically, increased filing fees will probably chill access to the civil courts for some.

"We're talking about access to justice here. Access to justice is a fundamental American value. We have a great legal system in the United States, but it's built on the premise that you have a lawyer. And if you don't have a lawyer, the system often doesn't work for you."

(And BTW that goes for contingency-fee lawyers, too, who are unable to represent the injured in far too many states because of fee caps and other “tort reforms.” Just sayin'.)

June 11, 2012

Last week watching Mad Men, when I heard Don Draper’s pitch to Dow Chemical about the wonders of Napalm (coincidently just as the country was recognizing the 40th anniversary of that iconic photo), I thought, "wow, if Don Draper were alive today – er, I mean a fictional TV character today - have I gotta company for him"!

Johnson & Johnson (JNJ) has agreed to pay as much as $2.2 billion to settle U.S. probes of the marketing of its Risperdal antipsychotic drug and other medications [i.e., the heart-failure drug Natrecorand the anti-psychotic medication Invega].

The settlement, which might be announced this week, will include a misdemeanor plea and criminal penalty of as much as $600 million… The accord also would resolve civil claims that J&J paid kickbacks to Omnicare Inc. (OCR), a company that dispenses drugs at nursing homes, the people said.

This comes on the heels of the company agreeing to stop selling vaginal mesh implants, which it improperly put on the market (see our earlier coverage here) and which subsequently injured or killed hundreds of women. And as if that were not enough:

J&J faces over 6,000 lawsuits from patients severely harmed after receiving a DePuy artificial hip known as ASR. According to victims, the ASRs – 93,000 of which DePuy recalled worldwide in 2010, including 37,000 in the U.S., since more than 12 percent of the devices failed within five years – caused joint dislocations, infections, bone fractures and other painful injuries.

Thousands of cases are pending in federal and state courts over J&J’s alleged failure to adequately warn consumers about the risk of tendon damage and tendon ruptures associated with the antibiotic Levaquin.

In April 2011, J&J reached a $70 million settlement over federal charges that it paid bribes and kickbacks to win business overseas. Under the agreement, the company pledged to pay a $21.4 million fine to settle Justice Department criminal charges and more than $48.6 million to settle SEC charges.

In March 2011, J&J’s McNeil subsidiary and two of its executives reached a consent decree with the FDA and the Justice Department over the company’s repeated unwillingness to comply with federally-mandated manufacturing practices. The agreement put McNeil’s Las Piedras, PR, Fort Washington, PA and Lancaster, PA plants under FDA supervision, required the company to adhere to a strict timetable to bring those facilities into compliance and threatened thousands of dollars in fines for decree violations, up to $10 million annually.

In January 2011, the company recalled nearly 50 million bottles and packages of consumer products, including Tylenol, Benadryl and Rolaids, due to lax cleaning procedures and other problems at its McNeil Fort Washington, PA manufacturing plant.

Also in January 2011, the state of Oregon filed a lawsuit, alleging that J&J and two subsidiaries endangered public health and safety by failing to notify consumers and retailers about defective Motrin for more than a year before recalling the product. According to state AG John Kroger, the companies conducted a “phantom recall” – hiring contractors to go into stores to secretly buy vials off shelves to avoid negative publicity – in direct violation of the state’s Unlawful Trade Practices Act. This Motrin buyback program came to light during a 2010 congressional investigation into recalls of over-the-counter McNeil drugs.

In December 2010, J&J recalled over 13 million packages of Rolaids after metal and wood particles were found in the antacids, causing vomiting, gum and tooth injury in some cases.

In May 2010, J&J’s McNeil unit pled guilty to a federal misdemeanor and was ordered to pay a $6.14 million criminal fine for promoting off-label use of its anti-seizure and migraine medication, Topamax. An affiliate of McNeil also agreed to pay over $75 million for illegally promoting the drug and causing false claims to be submitted to the government for unapproved uses.

In April 2010, J&J’s McNeil recalled more than 135 million packages of children’s and infant’s Motrin, Tylenol, Benadryl and Zyrtec for possible bacterial contamination and the presence of small metal parts. The tainted pediatric drugs had been produced at McNeil’s Fort Washington, PA plant.

The company even endangered babies with its signature Baby Shampoo line. In November 2011, J&J finally agreed to phase out the use of potentially cancer-causing chemicals in its baby products.

And that's just the recent stuff.

Last but by no means least, there's the problem of J&J’s longtime association with the tainted American Legislative Exchange Council (which we last covered here ). ALEC has already “lost the support of 18 corporations in recent months,” and J&J is being pressured to become #19. (See today’s op ed by Rashad Robinson, executive director of ColorOfChange, the largest online black civil rights organization. )

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